TaxTMI 
TaxTMI 
2000 (2) TMI 129
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....rties ; (5) Regional discounts ; (6) Temporary price promotion discount ; and (7) Price equalisation discount. 2. Before going into the issues specifically raised by the Learned Counsel, it is worthwhile to refer to a decision of the Supreme Court in Union of India v. Bombay Tyres International Pvt. Ltd. 1984 (17) E. L. T. 329. The ratio in this decision has not been understood or followed by the authorities below. More than 16 years have passed after the decision was rendered by the Supreme Court. It is rather unfortunate to state that the law laid down by Supreme Court has not been understood by the tax recovery authorities and their attempt is to deny its benefit to the assessees. For a proper understanding of the decision we read t....
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....nt and as explained in this order shall be computed and allowed on the basis of such price." As per this decision discounts allowed in the trade by the manufacturer should be allowed to be deducted from the sale price if the discount is known to the trade prior to the removal of the goods. The discount may be of various types. The nomenclature by which the discount is qualified is not of any significance. If such discount was known to the trade prior to the removal of the goods from the factory and shown that it is the practice of the trade, then that deduction is admissible. Tax paid by the manufacturer cannot be included in the value of the goods. This aspect is clear from Section 4(4)(d)(ii) of the Act, which says that value in relation....
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....d Supreme Court, we direct the authorities below to deduct amounts payable by way of turnover tax and interest on receivables. 6.Appellants manufacturer of food produce were offering trade discounts and discounts to catering institutions. These discounts are being offered by established practice which were being followed by the appellants. Under no circumstance can such discount be denied in the light of the decision of Supreme Court referred to earlier Authorities below have not properly appreciated the claim made by the appellant on these counts. Under Code Nos. 46001 and 46003 discounts were given to dealers under the title "On going discount". When this discount was offered to the dealers as per practice that existed in the trade, we ....
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.... to be an established trade practice. Out of the 7% given to Cash Distributors, they have to pass on 3% to regional distributors who distribute the goods in rural areas. In implementing this scheme initially the invoice is shown at a discount of 5% and remaining 2% is given to Cash Distributors on satisfactory production of documents to the effect that sales were effected through regional distributors. The actual amount of discount spent on this count is a deductible sum. Authorities below were not justified in denying this deduction. 9.By way of temporary price promotion discounts are allowed to distributors and consumers. These discounts are given by Cash Distributors to retailers on the basis of bulk purchases by them and are in the na....